The biggest Slovak bank successfully placed a EUR 100mn green senior preferred bond this week. This deal marks the first green bond for Slovenská sporiteľňa issued in accordance with Erste Group’s Sustainable Finance Framework. The senior preferred MREL eligible bonds will be issued under Group’s Multi Issuer Programme. The conditions of the transaction are favourable: A headline coupon of 0.375% for a 7-year maturity and a spread of MS+55 bps whereas the latter represents the lowest spread ever for any MREL eligible bond out of Slovakia.
“We have patiently waited for favourable market conditions and successfully entered the green bond market with theoretical greenium of 3 basis points. We are satisfied with the geographical distribution in particular; for the first time in our senior club deal the international demand outweighed the domestic one, the cooperation with German banks was also very good. We consider the issuance of green bonds an important milestone for the bank and we are expecting further activities in the area of sustainable financing going forward”, Richard Košecký, Head of Balance Sheet Management Division at Slovenská sporiteľňa quoted.
Distribution by geography was as follows: Austria 18%, Germany 24%, U.K. 20%, Slovakia 34% and other countries 4%. Distribution by investor type: 44% banks, 12% asset managers, 24% insurance and pension funds and 20% official institutions. The bonds will be issued at a spread of 55 basis points over the 7 years mid swap rate, the issue price will be 99.793% and the yield to maturity is 0.405% p.a. The bonds will be listed on the Bratislava Stock Exchange. Banks participating in the club deal were DZ Bank, Erste Group, Landesbank Baden-Wuerttemberg and Slovenská sporiteľňa.